Transcript Chapter 8: The E

The E-Marketing Plan
Creating an E-Marketing Plan
 Why would a company pay
so much to design and build
its Internet presence ?
– To protect the corporate and
brand identities
– Complexity of designing emarketing strategies
Creating an E-Marketing Plan
 An E-Marketing Plan is a company’s
blueprint for strategic direction
 Ad hoc – Companies develop strategies
without the development of an EMarketing Plan
• Example: www.yahoo.com
 75% of e-business will fail due to flaws
in planning
A Seven Step Marketing Plan
1.
2.
3.
4.
Conduct a situation analysis.
Identify target stakeholders
Set objectives
Design marketing mix strategies to meet
objectives
5. Design action plan
6. Develop a budget
7. Develop an evaluation plan
Exhibit 8 - 2 Marketing Plan Process
Venture Capital E-Marketing Plan
• Large Web sites are not profitable ventures, but
they are more concerned with establishing their
brands, ex: Amazon
• Start-Up companies are funded by:
–Private funds (family and friends)
–Angle Investors
–Venture capitalist (VCs)
•“I invest in people, not ideas,” Arthur Rock (VC), “If
you find good people, if they’re wrong about the
product, they’ll make a switch.”
Venture Capital E-Marketing Plan
• VCs look for plans that show:
• the e-business idea is a solid one,
• the entrepreneur has some idea of how to run the
business
• Once the start up business begins to boom, the VC
looks for an exit plan, and the stock usually goes
public, IPO
• The VC gets their money back and looks for
another investment
Key Success Factors
Key Dangers
§ Make it easy for customers to do
business with you.
§ Focus on the end customer for
your products and services.
§ Redesign your customer-facing
business processes from the end
customer’s point of view.
§ Wire your company for profit:
Design a comprehensive, evolving
electronic business architecture.
§ Foster customer loyalty, the key
to profitability in electronic
commerce.
§ Don’t completely redesign a
business to become an e-business.
§ Don’t suspend good project
management rules in the name of ebusiness.
§ Don’t assume technology can do
all the heavy lifting in e-business
implementation.
§ Don’t focus solely on current
customers for e-business.
§ Stay alert for new competition.
Exhibit 8 - 3 Critical Success Factors and Dangers for E-Business
Source: Success from Seybold (1998); danger from GartnerGroup (1999)
The Existing Marketing Plan
• Working with existing information is the
best place to start, if you want to follow
current positing strategies.
Situation Analysis
Conduct an Environmental Scan
–Legal/Political Environment
•Taxation, access, copyrights, & encryption
– Technological Environment
•Communication Infrastructures
•Bandwidths, and New browsing devices
Situation Analysis
Conduct an Environmental Scan
–USER Trends
•Focus on how the net audience has changed over the last six
months, last year, etc…
•Are there any trends?
•Is there any important target segments coming online?
–World Economies
•Understand overseas economies, also do they have the proper
infrastructures to support what we are doing?
Situation Analysis
Develop a Market Opportunity Analysis
- Includes both demand & supply analysis
•Demand side, reviews potential profitability
•Supply side, reviews competition, and finds
competitive advantages
- SWOT
Internal Capability
Examples
Customer interactions
E-commerce, customer service,
distribution channels
Production and fulfillment
SCM, production scheduling,
inventory management
People
Culture, skills, knowledge
management, leadership and
commitment to e-business
Technology
ERP systems, legacy applications,
networks, Web site, security, IT skills
Core infrastructure
Financial systems, R&D, HR
Exhibit 8 - 4 Key Internal Capabilities for E-Business
Source: Adapted from Kalakota (1999)
Situation Analysis
Develop a Market Opportunity Analysis
 Market Opportunity Analysis includes both demand
and supply analyses.
 The demand portion reviews various market
segments in terms of potential profit.
 The supply analysis review competition in selected
segments that are under consideration
 The purpose of the supply analysis is to assist in
forecasting segment profitability and finding
competitive advantages in the online market.
SWOT
Strengths, Weaknesses, Opportunities and Threats
This analysis objectively evaluates the
company’s strengths and weaknesses with
respect to the environment and the
competition
Strategic Opportunities
 A Key element in setting strategic goals is to take stock of
where the company currently is and the level of commitment
that it wishes to make to a business.
 The lowest level impacts individual business activities such as
order processing.
 The next level impacts business processes such as customer
relationship management
 The next level, enterprise is where the firm automates many
business processes in a unified system
 EB = EC + BI + CRM + SCM + ERP
 ERP – the key here is to make sure that the processes work
well together in a unified system
Level of business impact
Business transformation
(competitive advantage,
industry redefinition)
Pure
Play
Enterprise
Effectiveness
(Incremental sales,
customer retention)
Efficiency
(Cost
reduction)
Pure dot-com
(E*Trade)
Click and Mortar
(eSchwab)
Business Process
Activity
Exhibit 8 - 5 Level of Commitment to E-Business
Source: adapted from www.mohanbirsawhney.com
Customer
relationship
management
Brochureware,
Order processing
Pure Play
Advantages
 The final level is comprised
of internet pure plays
 Pure plays are companies
without brick and mortar
presence
 They are not held to the
same standards of
profitability as the brickand-mortar stores
 They are held to be
smaller and have more
agile cultures able to
move quickly in response
to market fluctuations
Activity Level
Business Process Level
Enterprise Level
Online market research
Online purchasing
Brochureware
Content publisher
E-mail
Online advertising
Online sales promotions
Order processing
Cost reduction using
electronic means
Negotiated pricing online
Segmented pricing online
Content sponsorship online
Knowledge management
Customer relationship
management (CRM)
Supply chain management
(SCM)
E-Commerce: tangible
products
Direct selling
Community building online
Affiliate program
Database marketing
E-tailer
Bit vendor
Online exchange
Online brokerage
Metamediary
Infomediary
Virtual mall
Shopping agent
Reverse auction
Online buyer’s coop
Mass-customization tools
Exhibit 8 - 6 Menu of Opportunities at Various Levels
of Commitment
Identify Target Stakeholders
When multiple targets are identified, they should be
ranked in order of importance so resources can be
allocated accordingly
 Each market should be well profiled by its
characteristics, behavior and desires
 Firms must understand the value proposition for
each market.
Set Objectives
 Use carefully worded objectives that flow from
plan analyses that have a task, contain a specific
measurement device, and has a time frame for
accomplishment.
Design Marketing Mix Strategies to
Meet the Objectives
 Strategic justification – shows how the strategy
fits with the firms overall mission and objectives
 Operational justification – identifies and
quantifies the specific process improvements that
will result from the strategy
 Technical justification – shows how technology
will fit and provide synergy with current IT
capabilities
 Financial justification – examines cost/benefit
analysis
Marketing Mix Component
Chapter
Business Model
Product
4
Digital value through new products
Price
4
Cost reduction using E-marketing
Negotiation
Segmented pricing
Distribution
5
Content sponsorship
Direct selling
Infomediary
Intermediaries
Broker: Online exchange
Online auction
Agent: Manufacturer’s agent
Affiliate program
Metamediary
Virtual mall
Shopping agent
Reverse auction
Buyer cooperative
E-tailer bit vendor
Tangible products
Marketing Communication
6
Content publishing
E-mail
Community building
Online advertising
Online sales promotion
Relationship Marketing
7
CRM
Exhibit 8 - 7
Selected EBusiness
Models Are
Also Marketing
Strategies
Action Plan
An action plan will decide which strategies are best to
promote the business or company. Having decided that
an Internet presence is essential the following
considerations are necessary:
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Project Scope
Site Development
Site Promotion
Site Maintenance
Web Site Example:
Project Scope
•To decide the level of Internet and e-commerce commitment
that is both beneficial, cost effective and advantageous to the
company.
•To evaluate the need for e-mail contact between stakeholders
and staff, and what staffing is necessary to implement such a
program.
Site Development
Build, Buy or Rent, the Following Considerations
Apply:
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Outsourcing – speeds completion of the project
Personnel Cost Savings
Faster Loading Site
User Friendly Product
More Professional Graphics & Information
Outsourcers are aware of Copyright Rules
First Impression is Paramount
http://www.forrester.com/
1999
Projected
Revenue (in
thousands)
276,844
%
Increase
over 1998
1999
Employees
67.9
2,011
Atlanta
*214,000
230.8
*1,700
San Francisco
*170,000
86.8
*1,050
150,000
983.6
1,300
Boston
*135,000
237.5
700
TMP Worldwide 1, 2
New York
*125,000
149.2
*350
7
c2o Interactive Architects
(EDS) 1
Dallas
125,000
177.8
350
8
Euro RSCG Worldwide
Interaction (Havas) 1
New York
120,900
54.0
793
9
AppNet 1
Bethesda, MD
110,000
521.5
1,000
1
0
Grey New Technologies 1
New York
106,000
41.3
850
1
1
OgilvyInteractive
(WPP)
New York
100,000
66.7
650
1
2
Agency.com1 (Omnicom)
New York
*100,000
278.0
1,000
1
3
Luminant Worldwide
(Y&R)
Dallas
95,883
NA
800
1
4
Organic (Omnicom)
San Francisco
*80,000
188.8
681
1
5
Xceed1
New York
74,000
19.4
450
Agency (Affiliation)
Headquarters
1
Sapient 1
Cambridge,
MA
2
iXL, Atlanta 1
3
USWeb/CKS 1, 2
4
Razorfish (Omnicom)
5
Digitas 2
6
1
1
New York
Exhibit 8 - 8 Top
15 U.S. Interactive
Advertising
Agencies
Source:
Adapted
from AdweekOnline
(www.adweek.com)
Site Promotion
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Register Site with Search Engines
Use Metatags, Keywords and HTML tags
List Site with Appropriate Directories
Utilize Electronic Press Releases
Link to Complimentary Web Sites
Incorporate Web Site Address in all Media
Consider Banner Advertising
Consider Hiring an Outside Firm to Promote Web Site
Links to Site Promotion & Search Engines:
www.yahoo.com/
www.hotbot.com
www.excite.com
http://www.adjacency.com/
Exhibit 8 - 9 Adjacency (Sapient) Builds and Promotes Web Sites
for Clients
Source: www.adjacency.com
Site Maintenance
 Decide How Often to Update Site
 Decide Whether to Outsource or Update in
House
 Evaluate the need for Human Resource for Web
Site Maintenance
Budgeting
Evaluate the cost/benefits analysis &
Identify Potential Revenue Streams:
 E-Commerce – Do we sell on-line?
 Content Sponsorship – Banners, Buttons,
Sponsorships
 Intermediary Fees – Broker and Agent Fees
Revenue Streams
 Initial funds to support a Web site come from:
– Investors
– Loans
– Firm’s operating budget
 Revenue streams that produce Internet profits
come mainly from:
– Direct sales
– Advertising sales
– Other fees
Cost Savings
By Selling and Marketing On-line
 Eliminating elements of the traditional
distribution chain
 Increases possibilities of greater revenue
 Saves on traditional marketing costs (printing,
postage)
 Increases target market to world-wide audience
Intangible Benefits
The industry is developing exponentially
creating new marketing opportunities, although
they may be hard to measure
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Goodwill
Brand Equity
Audience Measurement
Public Relations
Customer Satisfaction
Cost/Benefit Analysis
Analyze the cost
of e-marketing versus the benefits
Benefits
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Revenue increases
Cost decreases
Intangible benefits
Goodwill
Brand/Image Building
Relationship Building
Costs
 ISP Costs
 Hardware and
Software Costs
 Design Costs
 Maintenance Costs
Evaluation Plan
Monitor and Track Site Usage
 Cognitive
Measure unique visits and impressions
 Attitudinal
Survey customers for brand satisfaction
objective: CRM, firm would use AOV
(average order value) and LTV (lifetime
customer value)
 Transactive
Measure purchases, site traffic, previous
paths and click-through rate
The End